Principles of Financial Opportunity Reforms

The Financial Services Committee of the House of Representatives has a plan to offer reforms as a pro-growth, pro-consumer alternative to the Dodd-Frank Act, which is harming the economy and consumers.

Dodd-Frank Is a Burden on the U.S. Economy. I need not tell you that we continue to suffer from the slowest, weakest, most tepid recovery in our nation’s history. Some would say a lot of this has to do with our inefficient tax code, and it does. But beyond the tax burden that entrepreneurs face, there is a larger burden known as the regulatory burden –‒ the sheer weight, volume, complexity and uncertainty of a needless avalanche of Washington regulations –‒ much of which has come from Dodd-Frank. So, hear me well: On behalf of all hardworking, struggling Americans, I will not rest –‒ and my Republican colleagues on the House Financial Services Committee will not rest –‒ until we toss Dodd-Frank onto the trash heap of history.

Dodd-Frank stands as a monument to the arrogance and hubris of man in that its answer to incomprehensible complexity and government control is even more incomprehensible complexity and government control. It is a modern day Tower of Babel: 2,300-plus pages; 400 new regulations, spawning tens of thousands of pages of red tape. And its foundation very much rests on a false premise: that somehow deregulation was the root cause of the crisis. But it was not deregulation. In fact, in the decade leading up to the financial crisis, regulatory restrictions in the financial sector actually increased. It was not deregulation; but it was dumb regulation. And there was no dumber regulation than the affordable housing goals of Fannie Mae and Freddie Mac that incented, cajoled and mandated financial institutions to loan money to people to buy homes that they could not afford to keep. Add to this the Federal Reserve’s monetary policy that held interest rates too low for too long and we had a housing bubble that inevitably burst. As the current mayor of Chicago once infamously said, “never let a serious crisis go to waste.” They didn’t, and Dodd-Frank was born of the crisis.

Continue reading